Because most of those charges have not been settled, the NLRB has now brought formal complaints against McDonald's and certain of its franchisees in Arizona, California, Georgia, Illinois, Indiana, Louisiana, Michigan, Minnesota, Missouri, New York, and Pennsylvania. The complaints allege that McDonald's and its franchisees, as joint employers, engaged in a variety of conduct that, in the NLRB's words, includes:

Discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activity, including threats, surveillance, interrogations, promises of benefit, and overbroad restrictions on communicating with union representatives or with other employees about unions and the employees’ terms and conditions of employment.

By alleging that McDonald's and its franchisees, as joint employers, engaged in the above conduct, the NLRB is essentially seeking to overturn decades of franchise legal precedent recognizing that franchisors are fundamentally different and distinct from their franchisees, and that franchisees, and not franchisors, are solely responsible for their own employees.

Given these significant concerns, it is particularly important for franchisors to review their internal policies, procedures, and legal documents to determine what, if anything, can be done differently to try to avoid "joint employer" liability. As I stated in a previous post, this is a good time for franchisors to talk with counsel about ways that those documents can be amended to offer additional elements of protection against being found to be a "joint employer" of franchisees' employees.

Because most of those charges have not been settled, the NLRB has now brought formal complaints against McDonald's and certain of its franchisees in Arizona, California, Georgia, Illinois, Indiana, Louisiana, Michigan, Minnesota, Missouri, New York, and Pennsylvania. The complaints allege that McDonald's and its franchisees, as joint employers, engaged in a variety of conduct that, in the NLRB's words, includes:

Discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activity, including threats, surveillance, interrogations, promises of benefit, and overbroad restrictions on communicating with union representatives or with other employees about unions and the employees’ terms and conditions of employment.

By alleging that McDonald's and its franchisees, as joint employers, engaged in the above conduct, the NLRB is essentially seeking to overturn decades of franchise legal precedent recognizing that franchisors are fundamentally different and distinct from their franchisees, and that franchisees, and not franchisors, are solely responsible for their own employees.

Given these significant concerns, it is particularly important for franchisors to review their internal policies, procedures, and legal documents to determine what, if anything, can be done differently to try to avoid "joint employer" liability. As I stated in a previous post, this is a good time for franchisors to talk with counsel about ways that those documents can be amended to offer additional elements of protection against being found to be a "joint employer" of franchisees' employees.

Matthew Kreutzer is a Partner at Howard & Howard Attorneys and serves as Chair of the firm's Franchising, Distribution, and Antitrust Practice Group. Mr. Kreutzer, who is based in the firm's Las Vegas office, is a Certified Specialist in Franchise and Distribution Law by the State Bar of California's Board of Legal Specialization.

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This blog is dedicated to advancing the franchising industry through the sharing of business, legal, and practical information and ideas. This blog is a service of Howard & Howard's Franchising, Distribution, and Antitrust Practice Group.